United Pension Payment Decision on the Horizon

The statement came as part of a pension primer letting
employees know what would happen if United replaced its
pension plans with another retirement plan, such as a
401(k), the Chicago Tribune reported. In the pension
primer, the airline said that most current retirees would
not see dramatic reductions in their monthly pension
payments if the company migrated to a new retirement plan.
The pension decision will come as part of a proposed new
business plan for the troubled airline.

A United court filing accused the International
Association of Machinists and Aerospace Workers of
instigating “a hornet’s nest of litigation” to force United
to make pension payments into the plans, which the
government estimates are underfunded by more than $8
billion, and which the company has said it “likely” will
terminate. United stopped making payments into the pension
plans in July, after it was denied a federal loan guarantee
that would have helped it out of bankruptcy.

United defended its decision to stop making pension
payments, saying it is legal because the carrier is in
bankruptcy. United also argued in its filing that it has
been open with the machinists union about its pension
decisions.

The Pension Benefit Guaranty Corp., a quasi-governmental
agency that insures private-sector pensions, said that it
is illegal to miss payments during bankruptcy. Payments can
be missed only if plans are terminated or if the Internal
Revenue Service has granted a waiver, pension agency
spokesman Jeffrey Speicher told the newspaper.